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Another enormous bailout may be in the works, this time for underwater homeowners, writes Reuters blogger James Pethokoukis. Rumor has it that the Obama administration will sidestep Congress and order lenders Fannie and Freddie to forgive some of the mortgage debt of Americans who owe more than their homes are worth. He offers no sources but says Wall Street banks are quietly alerting clients to the possibility.

"The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses," writes Pethokoukis. "The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie."

This new story is called a scare tactic, thanks for the fun read republican sensationalist

JimW

Aug 5, 2010 9:26 PM CDT

As much as I can't stand the king of flip-flop J. McCain, I do have to admit 1 thing. When he 1st suggested this as a, alternative to bailing out the damn banks, I thought it was a masterful idea. And as deep in the hole as I am right now on my house, I have to say, even if selfishly, that I would look forward to such an act. Hey, we gave phony money to the banks, might as well give me some as well and finally put the load on them where it belonged in the 1st place, because they can still take you to court to collect, even if it's phony money. I haven't missed a payment, but sure have thought about just moving out and stripping the inside bare on the way out. Letting the tax cuts go is a no-brainer to me. Those cuts NEVER gave any help to the jobs market (plenty of rock-solid study to show that) , and I see no problem at all taxing the 2% that have 95% of the money. None whatsoever. It was the 2% that basically caused all this BS anyhow, time to pay up boys ;-)